Leidos Q1 Revenue Rises 4% to $4.4B, Non-GAAP EPS Up 5%
LDOS•Leidos delivered Q1 revenue of $4.4 billion (up 4% YoY) and non-GAAP EPS of $3.13 (up 5%), with GAAP EPS of $2.56 reflecting $39 million of Entrust acquisition costs. The company generated $270 million of free cash flow, raised full-year guidance, declared a $0.43 dividend and booked $1.665 billion in new contracts.
1. First-Quarter Financial Performance
Leidos reported Q1 fiscal 2026 revenue of $4.40 billion, a 4% increase year-over-year, with net income of $335 million, or $2.56 per diluted share. Excluding $39 million of acquisition and joint venture costs, non-GAAP EPS rose 5% to $3.13 while adjusted EBITDA reached $614 million (14.0% margin).
2. Cash Flow and Capital Deployment
Operating activities generated $301 million in net cash and free cash flow totaled $270 million. Leidos invested $2.36 billion primarily through the Entrust acquisition and funded financing activities with $1.4 billion in senior notes, $300 million in commercial paper, $243 million in share repurchases, and a $55 million dividend payout.
3. Strategic Acquisitions and Guidance
Leidos completed the acquisition of Entrust Solutions Group and advanced a joint venture combining its Security Enterprise Solutions and Industrial Automation units with Analogic. Based on strong execution and higher cash flow, management raised full-year revenue, earnings, and free cash flow guidance for fiscal 2026 and declared a $0.43 per-share dividend.
4. Major Contract Wins and Backlog Growth
New bookings totaled $3.3 billion, with a book-to-bill ratio of 0.8, lifting total backlog to $48.4 billion (4% growth) and funded backlog to $9.6 billion (31% growth). Key awards included a five-year, $869 million AI-enabled Army task order, over $461 million in cyber operations work under GSM-O II, and a $335 million NSA TechSIGINT modernization contract.
